Kicking Corzine Out of the ‘Club’ Proved to Be Not So Easy

Jon S. Corzine could be the Groucho Marx of Wall Street.

For Mr. Marx’s part, the comedian vowed to avoid “any club that would accept me as one of its members.” As for Mr. Corzine, the former Democratic senator who ran MF Global until it collapsed in 2011, he faced expulsion from a group to which he does not even belong.

The National Futures Association, the futures industry’s self-regulatory group, convened on Thursday to consider a lifetime ban of Mr. Corzine. Two of the group’s newest boardmembers championed the plan as retribution for Mr. Corzine’s role in the demise of MF Global, which improperly snatched $1.6 billion from its customers before filing for bankruptcy.

If a majority of the board members voted yes, the group would have moved to hold a hearing over Mr. Corzine status before actually enacting the ban.

But when the board emerged from its meeting late Thursday, the group issued a cryptic statement suggesting that Mr. Corzine could not be so easily ostracized because of, well, a small flaw in the plan: “Mr. Corzine is not currently a member of N.F.A.,” the board’s chairman declared in the release.

Actually, the chairman noted in the statement, there was more than one problem. Any action against Mr. Corzine could have complicated an ongoing federal investigation into MF Global’s misuse of the customer cash.

“N.F.A.’s board understands that there are ongoing investigations concerning Mr. Corzine’s activities at MF Global and does not wis! h to take any action that could interfere with those investigations,” the chairman, Christopher Hehmeyer, said in the statement.

Still, Mr. Corzine is not necessarily free of any future wrath from the group.

“Once the appropriate agencies have completed their investigations, N.F.A. has the authority to bring disciplinary action against Mr. Corzine for violations of any N.F.A. rules that occurred while he was a member,” Mr. Hehmeyer said. (He was, presumably, a member when he ran MF Global, once one of the major players in the futures industry.) “The sanctions for disciplinary actions could include a lifetime ban and significant monetary fines,” he explained.

The action, or lack thereof, dealt a blow to the plan by the group’s two new directors, James Koutoulas and John Roe. They had both won spots on the association’s board after campaigning on a pledge to oust Mr. Corzine from their club. The two traders rose to prominence in 2011 as advocates for MF Global customers, formin a nonprofit and making the rounds of newspapers and CNBC.

Mr. Koutoulas declined to comment on Thursday, citing the board’s confidentiality policy.

His plan to expel Mr. Corzine grew from mounting frustration over the slow-developing federal investigation into MF Global. After more than a year of investigating Mr. Corzine, regulators and criminal investigators have not currently filed any charges, fueling concerns that Mr. Corzine would escape unscathed.

A ban from the futures association would have amounted to little more than a wrist-slap to someone like Mr. Corzine, who once ran Goldman Sachs and served as a senator from New Jersey. Still, the move would have complicated any future plans he may have to open a trading firm. And if Mr. Corzine decides to one day rejoin the industry he could face an unfriendly welcome.

!

The gr! oup on Thursday vowed that he “will not be granted membership unless N.F.A., after completing its fitness investigation, resolves” concerns about his ability to run a futures firm.

Mr. Corzine, perhaps following in Mr. Marx’s footsteps, might just steer clear.

K.K.R. Is Said to Bid $3.7 Billion for Gardner Denver

Kohlberg Kravis Roberts has bid about $3.7 billion for Gardner Denver, a maker of industrial equipment like blowers and compressors, a person briefed on the matter said on Thursday.

K.K.R. has offered about $75 a share, this person said. That represents an 11 percent premium to Gardner Denver’s closing price on Thursday.

The offer follows a prolonged sales process for Gardner Denver, which disclosed in October that it had hired Goldman Sachs to explore a sale. A number of potential buyers had been solicited since then.

News of the bid was reported earlier by Bloomberg News.

CNBC to Buy ‘Nightly Business Report’

“Nightly Business Report,” the pioneering public television series that has struggled financially in recent years, is getting a new deep-pocketed commercial owner, the 24-hour business cable channel CNBC, a unit of Comcast’s NBCUniversal.

CNBC announced Thursday afternoon that it would purchase the rights to the show, available in 96 percent of U.S. television homes, from investment firm Atalaya Capital Management, for an undisclosed price. CNBC will begin producing the program â€" which today originates from Miami, with bureaus in New York and Washington, and has been sold twice in recent years â€" from its Englewood Cliffs, N.J., headquarters on March 4.

The show will keep its format and be anchored by CNBC’s Tyler Mathisen and Susie Gharib, the current co-anchor; CNBC officials said Ms. Gharib is under contract through the end of the year. Her co-host, Tom Hudson, will depart, as will the rest of the current staff of 18 full-time employees.

In a telephone interview, Rick Schneder, the president and chief executive of Miami public station WPBT, where the show is based, called the new owners “a good thing for the program and for the public television system.” He said the deal not only would ensure the show’s survival, but “it will likely be enhanced. NBR has always lacked having a major news-gathering organization behind it.”

The purchase is the third change of hands for “Nightly Business Report” since August 2010, when Mykalai Kontilai, an entrepreneur and former mixed martial arts manager, bought it from WPBT, where the program began in 1979, before the era of 24-hour cable business news.

Atalaya Capital Management, which had backed Mr. Kontilai’s purchase, took over the program in November 2011, after few of Mr. Kontilai’s ambitious plans to expand were achieved. In recent months, Atalaya has been searching for a buyer.

In a telephone interview, Nikhil Deogun, CNBC’s senior vice president and edito! r in chief for business news, called “Nightly Business Report” “a great brand with a long tradition of business news.” He said that the show’s audience “has very little duplication, as best we can tell” with the CNBC audience, adding that the program will provide additional opportunities for CNBC’s roster of journalists.

PBS withdrew its financial support of “Nightly Business Report” in 2011 and stopped distributing it. Ratings have been drifting lower and the show’s sole financial underwriter, Franklin Templeton Investments, ended its support in August. In December, the program closed its Chicago bureau and laid off several employees, its second round of layoffs since 2010.

Mr. Deogun said CNBC will seek new underwriters, adding that parent NBCUniversal “has a great sales team.”

American Public Television, an alternative program delivery service, distributes the show to 180 public television stations nationwide and will continue to do so.

In a Thursday memoto employees, Mr. Schneider wrote, “This is a difficult day in the history of WPBT,” given the staff layoffs. But, he added, “It has been clear for months, even years, that the existing business model for NBR was unsustainable as national production underwriting dried up. Atalaya deserves credit for funding the series since Franklin Templeton sponsorship ended last August.”

Ms. Gharib, in a telephone interview, called the news “bittersweet” because the rest of the staff would be departing, but said, “finally NBR is getting the resources that we needed so badly. I feel good that CNBC sees value in ‘Nightly Business Report.’ It’s a testament to the high level of the program.”

In Apple Fight, Einhorn Unveils ‘iPrefs’

Apple Inc. has introduced more innovative consumer products than perhaps any other company has over the past decade: the iPod, the iPhone, the iPad.

Now the hedge fund manager David Einhorn wants the company to roll out what he calls “iPrefs,” which he say could produce $61 a share in additional benefits for investors.

It’s a cutesy name for the class of perpetual preferred shares that Mr. Einhorn has called upon the technology giant to roll out as a way to deliver more cash to its shareholders. And for over an hour on Thursday, the Greenlight Capital chief patiently walked listeners through his argument about why those securities make the most sense for returning the company’s $137 billion cash hoard to what he said were its rightful owners.

Flipping through a voluminous PowerPoint presentation, Mr. Einhorn argued that his idea bore merit and deserved shareholder support. He also explained how iPrefs work: Apple would issue one preferred share, carrying a quarterly dividend of 50 cents each, for each outstanding common share.

He conceded that the idea was unusual. But he argued that it was a fresh way to reward shareholders while letting Apple hold onto a still-substantial “rainy day” fund.

“We know they embrace innovation and can recognize it when they see it, even if it isn’t the kind of innovation people usually think of when they think of Apple,” Mr. Einhorn said.

“We hope Apple agrees with us when we say that iPrefs are an innovative idea whose time has come.”

The conference call came after several current and former investors in Greenlight called upon Mr. Einhorn to halt his fight, which has included suing the company for what the hedge fund manager called an improper bundlin! g of several shareholder initiatives. The proposal Apple’s proxy includes the elimination of the company’s ability to issue preferred shares without shareholder consent.

Calpers, the big California pension fund, has urged shareholders to support the so-called proposal 2, arguing that it actually promotes good corporate governance.

A federal district court judge is weighing issuing a preliminary injunction on Apple’s shareholder vote on Feb. 27, as he prepares a ruling on whether Apple violated securities rules. The judge, Richard Sullivan, has indicated that Mr. Einhorn’s lawsuit appears likely to succeed as a matter of law.

David Einhorns Apple Inc. iPrefs Presentation by

Blurry Backgrounds, Big Sensors and Bokeh

February 21, 2013, 3:37 pm

In my New York Times column on Thursday, I reviewed the Sony RX1: the first compact digital camera with a full-frame (that is, HUGE) sensor inside.

As I wrote, “these sensors are as big as an old piece of 35mm film (1.7 inches). They deliver unparalleled low-light quality, richness of color, detail and soft-focused backgrounds.” Later, I pointed out, “This camera creates beautiful blurry backgrounds. That soft-focus background effect is a hallmark of professional photography â€" and of big-aperture, big-sensor cameras. Until now, few pocket cameras could defcus the background at all.”

Now, photographers online are a cantankerous lot. Photography, in the end, is something of a black art, and everybody’s got an opinion. So it didn’t take long for a few e-mails to arrive along these lines:

“I don’t know why you keep insisting that soft focus backgrounds are dependent on ‘professional cameras’ and/or sensor sizes. The amount of soft focus in a photo is entirely dependent on the lens aperture and focal length. A bigger sensor may have better image quality and better grain upon very close examination, however, the depth of field and area that is in soft focus will be exactly the same. It’s PHYSICS.”

Well.

I’m confident that I’m right. After reviewing hundreds of cameras, I can say with certainty that those with big sensors do the best at blurring the background.

You’ll also hear that defocusing effect called “bokeh” or “shallow depth of field.” (The “field” is the area ! that’s in focus, as measured in its distance from the camera. A shallow depth of field means that only a thin slice of the scene â€" back to front â€" is in focus, and everything closer and farther is pleasingly blurred.)

Pocket cameras, which generally have tiny sensors, generally keep everything in focus. They have a huge depth of field. You usually can’t get the bokeh effect at all.

To answer this fellow by e-mail, I decided to find out why a big sensor contributes to blurry backgrounds.

If you Google “sensor size bokeh,” you can find many confirmations that sensor size is, indeed, a factor in blurring the background. Here’s an example:

Background blur depends on your depth of field. Depth of field depends on several factors:
1.Lens focal length (35mm, 200mm, 50mm)
2.Lens aperture (f1.8, f5.6, f8)
3.Sensor size (APS-C, 35mm, medium format, large format)
4.Subject distance
With (1), the longer the focallength, the thinner the DOF. With (2), the larger the aperture (smaller number) the thinner the DOF With (3), the larger the sensor, the thinner the DOF. With (4), the closer the subject, the thinner the DOF.
Example: If you have a 200mm lens, at say, f2.8, on a 35mm full frame sensor, and the subject is near you (2-3m), you can blur the background quite a lot.
Inversely, if you have a 35mm lens, at f8, on a cropped dslr (APS-C), and the subject is 6m from you, the background won’t really be blurred out.

So it’s true that sensor size is a factor â€" but I was still looking for the reason.

After an evening of reading dense articles and even watching some technical YouTube videos, I have  my answer.

It’s true that a larger sensor does not, by itself, create the blur effect. And yet it’s also true that a camera with a larger sensor does create the blur effect.

I know, right Huh

I found the ! clearest ! explanation here, at Cambridge in Colour, (and it’s still not all that clear). It boils down to this: a smaller sensor requires a wider lens. And a wider lens requires a smaller aperture (the opening created when the shutter opens) to capture a scene of the same width. And a smaller aperture means bigger depth of field â€" less blur.

Or, as the article puts it: “As sensor size increases, the depth of field will decrease for a given aperture (when filling the frame with a subject of the same size and distance). This is because larger sensors require one to get closer to their subject, or to use a longer focal length in order to fill the frame with that subject.” (Focal length means how much you’re zoomed in.)

The same article, by the way, makes two other points pretty well. First, bokeh isn’t always desirable. It’s fantastic for portraitsâ€"but for landscapes, you usually want everything in focus. maller sensors, like the ones in all small, inexpensive cameras, may be terrible at blurring the background, but they’re great at keeping everything in focus. On cameras with huge sensors, it may be difficult to create large depth of field (and keep everything in focus).

The article also explains why big-sensor cameras are so much more expensive than small ones (the Sony RX1 compact, for example, is $2,800). It has to do with “how manufacturers make their digital sensors. Each sensor is cut from a larger sheet of silicon material called a wafer, which may contain thousands of individual chips. Each wafer is extremely expensive (thousands of dollars), therefore fewer chips per wafer result in a much higher cost per chip.”

In addition, every time you stamp out a big sensor, you’ve increased the odds of including a defect that was present in the wafer. Therefore, “the percentage of usable sensors goes down with increasing sensor area.” The bottom line: “A sensor with twice the ! area will! cost more than twice as much.”

Anyway. To conclude today’s class: Clearly, sensor size does affect your ability to create the blurry-background effect. Not on its own, but because of its relationship to the lens. The smaller the sensor, the wider the lens, and the harder it is to offer a large apertureâ€"which is the key to the blurry-background effect.

Or, as my correspondent might put it: “It’s PHYSICS.”

The Tax Advantages Behind an Oil Deal

A $4.3 billion oil deal parlays the financial engineering of an already financially engineered corner of the industry. Linn Energy’s $4.3 billion acquisition of Berry Petroleum, including debt, is the first time an oil-producing master limited partnership has swallowed a whole exploration company. The bold move leans on the tax advantages of such structures and raises their risk profile.

The $300 billion M.L.P. sector, which is allowed to pass profit through to investors before it is taxed, has its foundations in pipeline companies whose steady fees are broadly impervious to the wild swings in commodity prices. In recent years, M.L.P.s have been expanding into new and more volatile areas,including exploration and production. Linn Energy is the largest among them with a $7.5 billion market value.

Last year, the partnership raised the risk stakes. It set up LinnCo - a shell company - to create a currency for billions of dollars of deals a year. The idea is to keep adding returns from older wells to the income stream. Tax advantages partly explain how Linn can pay just a 20 percent premium for Berry, about half the average fetched by exploration companies last year, according to Thomson Reuters data.

The wheeling and dealing involved is head-spinning. LinnCo will issue new shares to fund the deal. Then, Berry will be converted into a limited liability company. Following that, its assets will be swapped for units in the M.L.P. All of this will allow Linn Energy to own Berry’s reserves and fields without any immed! iate payment of tax.

It’s a long way from oil partnerships of yore. The sub-sector in which Linn Energy operates, the scale it is pursuing and the way in which it is going about it shouldn’t be confused with a typical M.L.P. Companies like Linn hedge considerably to mitigate gyrations in oil prices, but hedges don’t always work perfectly and some exposure will always remain anyway.

It’s why investors in Linn Energy demand an 8 percent yield compared with just 4.7 percent for Enterprise Products Partners, a $50 billion pipeline M..LP. The gap should arguably be larger, given Linn and its peers collectively pay 8.6 percent. Any narrowing would be a red flag that the risks are outrunning the possible rewards.

Christopher Swann is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit a href="http://www.breakingviews.com/home/">breakingviews.com.

For Michael Kors, Cashing Out Is Very Much in Fashion

Having spent more than three decades climbing to the top of the fashion world, the designer Michael Kors could hardly be described as an overnight success.

But it has taken only 14 months, coupled with Wall Street’s buoyant capital markets, for Mr. Kors to become enormously rich.

Since December 2011, when Michael Kors Holdings went public, Mr. Kors has sold about 17 million shares of stock. His latest sale of about 3 million shares came on Thursday as part of the company’s third so-called secondary stock offering since its initial public offering. Mr. Kors still holds about 2.5 percent of the company, or about 4.9 million shares, down from his roughly 12 percent stake at its I.P.O.

All told, Mr. Kors has sold roughly $650 million worth of his company’s stock, and retains a roughly $300 million stake. Not bad fora Fashion Institute of Technology dropout.

Mr. Kors and his financial backers (more on them later) have exploited Michael Kors’s strong financial performance and soaring stock price to cash out of their holdings. The company’s shares have more than tripled since the I.P.O. Mr. Kors and the other insiders have now sold big blocks of stock at four different times, each time higher than the previous sale.

Yet last week, Michael Kors reported another excellent earnings report and the promise of continued growth. “Another stellar quarter . . . Michael, you’re the man!” exclaimed Randal Konik, an analyst for Jefferies, who raised his price target on the company’s stock to $80 a share.

Brian J. Tunick, a JPMorgan analyst, increased his estimates, noting “the company’s strong brand momentum and seasoned management team are extremely well positioned to continue gaining market share in the global accessories market.” Mr. Tunick contrasted Michael Kors’s strong numbers with the weak financial results posted by its archrival Coach, underscoring Michael Kors dominance of the “affordable luxury” category.

“We belive that the Michael Kors brand is ideally positioned within the global luxury lifestyle market and we look forward to delivering on our long-term objectives,” said John D. Idol, the company’s chairman and chief executive.

Yet Mr. Idol, who has run the company since 2003, has also been eagerly selling his holdings. After Thursday’s sale of about two million shares, Mr. Idol, a veteran fashion executive who previously served in senior posts at Ralph Lauren and Donna Karan, will have sold more than $400 million of shares owned by him and his family. He retains a roughly one percent stake in the company.

But the money raised by Mr. Kors and Mr. Idol look modest compared with that of of Michael Kors’s private equity investors, Lawrence S. Stroll and Silas K. F. Chou. Mr. Stroll, a Canadian, and Mr. Chou, a Hong Kong resident, are a pair of fashion-industry tycoons who run Sportswear Holdings Limited, which acquired the Michael Kors company in 2003 for about $100 millio! n.

! Heading into the I.P.O., Mr. Stroll and Mr. Chou controlled slightly more than half of Michael Kors. On Thursday, they sold about two-thirds of their remaining stake, and now own about six percent of the company. They have sold roughly $3 billion worth of shares over the past 14 months.

The aggressive cash-outs by Mr. Kors and his business partners has always been part of the bear case on Michael Kors. But so far, anyone who has resisted buying the company’s stock has rued that decision. Yet with this latest round of sales, investors appear concerned. Michael Kors shares, which peaked at $65 a share on Tuesday, have dropped nearly 10 percent since share sale was announced.

Rothschild Loses His Battle for Control of Mining Company Bumi

LONDON - The battle for control over the mining company Bumi reached a climax on Thursday as shareholders voted against a major board change proposed by the British financier Nathaniel Rothschild.

The decision signifies the end of a monthslong feud between Mr. Rothschild, heir to one of Europe’s banking families, and the Indonesian Bakrie family dynasty for control of coal mining assets across the Southeast Asian country.

In an acrimonious battle that had become increasingly personal, Mr. Rothschild, 41, had proposed to replace 12 of Bumi’s 14 board members, including its chief executive and chairman.

The British financier planned to name his own management team, including his own attempted return to Bumi’s board from which he resigned last year.

After a two-hour shareholder meeting on Thursday, held on the grounds of military barracks of Britain’s oldest regiment in central London, Bumi’s investors, which included major institutional shareholders as well as retail investrs, rejected the majority of Mr. Rothschild’s proposed board changes.

“Is there a future for this company” Robin Renwick, Bumi’s non-executive director, asked the gathered shareholders. “We have all heard a lot of doom and gloom. Absolutely there is a future.”

The failure to replace Bumi’s board is a major setback for Mr. Rothschild, the former co-chairman of the hedge fund Atticus Capital, who co-founded Bumi in 2010 through a $3 billion deal with the Bakrie family that created the London-listed mining giant.

Since the original deal was first announced, little has gone right for the ill-fated company. The global economic slowdown has slashed demand for coal, particularly in fast-growing emerging economies, and Bumi’s boardroom infighting has been mirrored by a 60 percent fall in the company’s share price over the last three years.

Last year, the mining company announced an investigation into alleged financial misconduct totaling around $500 million at Bumiâ€! ™s Indonesian subsidiaries. The move was quickly followed by an offer by the Bakries to acquire all of the company’s mining assets for roughly $1.2 billion.

As part of the continuing board intrigue, the Indonesia family had sold a stake in Bumi late last year to Samin Tan, a fellow Indonesian mining mogul, for $1 billion. The deal helped the Bakries to repay loans owed to a consortium of banks led by Credit Suisse.

During the shareholder meeting on Thursday, Mr. Rothschild repeatedly called on Mr. Tan, who will step down as Bumi’s chairman, to answer shareholders’ questions. Despite the demands, the majority of the talking was left to the company’s other board members.

Talking to reporters at the sidelines of the meeting, the British financier, who was accompanied to the event by his mother, said his motivation was not directd specifically at his former Indonesian partners, but targeted at rebuilding the company’s stock price.

“It’s not personal,” Mr. Rothschild said before the results of the shareholder vote were announced. “The board has an enormous amount to do to win back the support of minority shareholders.”

With the British financier’s proposed rejected, Bumi said it would now focus on divesting its coal assets to the Bakrie Group, as well as on developing its remaining mining resources.

The result is a personal loss for Mr. Rothschild, whose hopes of securing victory were dealt a blow earlier this week when a major Indonesian investor connected to the Bakries sold shares worth 10 percent of Bumi’s total stock to the Indonesian media mogul Hary Tanoesoedibjo and two hedge funds.

The share sale followed a ruling by British authorities that capped the voting rights of some of Bumi’s majority Indonesian shareholders. By selling shares to the new investors, who were expected t! o vote ag! ainst Mr. Rothschild’s proposals, analysts say the Bakrie family increased their chances of successfully opposing the boardroom changes.

The British financier said on Thursday that he would retain his minority stake in Bumi.

The battle for control of Bumi could have wider implications. Aburizal Bakrie, who heads the Indonesian family, is running for president in the Southeast Asian country’s presidential elections next year. A potential rival for Indonesia’s highest office is Prabowo Subianto, the brother of Indonesian billionaire Hashim Djojohadikusumo, who backed Mr. Rothschild’s attempted board changes and who would have joined Bumi’s board if the British financier had won shareholder backing.

New Wave of I.P.O.\'s in Qatar Appears Ambitious

Qatar’s planned initial public offering bonanza may be socially driven but it looks a bit ambitious from a financial standpoint. The Gulf emirate is planning a wave of new listings on the local exchange. The aim is to increase the private sector and give Qatari nationals a chance to participate in the country’s global financial expansion. It may also be a way to modernize the traditional relationship between the absolute monarchy and its citizens.

The sovereign wealth fund Qatar Holding is spinning off assets to create a new $12 billion investment firm, Doha Global Investment. Another firm, Infrastructure Investment, is expected to be marketed as a play on the $120 billion worth of spending the emirate is planning for the 2022 football World Cup. Finally, according to sources, Qatar Petroleum is preparing to spin off a number of assets in an offering.

The I.P.O. wave is also intended to foster a more responsible spending culture among the nationals of one of the richest countries in the wold. The government provides free education and health care, but three-quarters of its citizens still have large debts, mostly over $70,000, according to a government report. Instead of increasing savings, the emirate’s infamous public-sector salary increases keep luxury-car dealers busy and fuel inflation.

The listings will go some way to stave off any mumblings that the tiny local population of around 250,000 isn’t sharing the benefits of the state’s spending on everything from the luxury department store Harrods to Egypt. Qataris are not unhappy, but in the post-Arab Spring era, monarchs across the gulf are anxious to give their citizens less reasons to complain.

However, with privately owned companies also eying the market, there are concerns that Qatar won’t be able to absorb all the new issues. The stock exchange has a total market capitalization of $130 billion, but liquidity among the 40-odd stocks is poor, and the free floats tiny. What’s more, the emirate’s most recen! t stock issues haven’t gone well. Shares in Vodafone Qatar, which floated in 2009, trade at a 14 percent discount to its offer price.

At some point the emirate may realize that there are also other ways than the stock exchange to tackle its social issues.

Una Galani is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

New Wave of I.P.O.\'s in Qatar Appears Ambitious

Qatar’s planned initial public offering bonanza may be socially driven but it looks a bit ambitious from a financial standpoint. The Gulf emirate is planning a wave of new listings on the local exchange. The aim is to increase the private sector and give Qatari nationals a chance to participate in the country’s global financial expansion. It may also be a way to modernize the traditional relationship between the absolute monarchy and its citizens.

The sovereign wealth fund Qatar Holding is spinning off assets to create a new $12 billion investment firm, Doha Global Investment. Another firm, Infrastructure Investment, is expected to be marketed as a play on the $120 billion worth of spending the emirate is planning for the 2022 football World Cup. Finally, according to sources, Qatar Petroleum is preparing to spin off a number of assets in an offering.

The I.P.O. wave is also intended to foster a more responsible spending culture among the nationals of one of the richest countries in the wold. The government provides free education and health care, but three-quarters of its citizens still have large debts, mostly over $70,000, according to a government report. Instead of increasing savings, the emirate’s infamous public-sector salary increases keep luxury-car dealers busy and fuel inflation.

The listings will go some way to stave off any mumblings that the tiny local population of around 250,000 isn’t sharing the benefits of the state’s spending on everything from the luxury department store Harrods to Egypt. Qataris are not unhappy, but in the post-Arab Spring era, monarchs across the gulf are anxious to give their citizens less reasons to complain.

However, with privately owned companies also eying the market, there are concerns that Qatar won’t be able to absorb all the new issues. The stock exchange has a total market capitalization of $130 billion, but liquidity among the 40-odd stocks is poor, and the free floats tiny. What’s more, the emirate’s most recen! t stock issues haven’t gone well. Shares in Vodafone Qatar, which floated in 2009, trade at a 14 percent discount to its offer price.

At some point the emirate may realize that there are also other ways than the stock exchange to tackle its social issues.

Una Galani is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Linn Energy to Buy Berry Petroleum for $2.5 Billion

Deal making in the oil patch continued on Thursday, as Linn Energy agreed to buy Berry Petroleum for about $2.5 billion, expanding its presence in oil-rich shale formations.

Under the terms of the deal, an affiliate of Linn, LinnCo LLC, will issue 1.25 million new common shares for each Berry share. That amounts to $46.24 a share, a roughly 20 percent premium to the target’s closing price on Wednesday.

LinnCo will then transfer Berry’s assets to Linn in exchange for additional ownership units in its sibling, which is structured as a master limited partnership. Including the assumption of debt, the deal is valued at $4.3 billion.

By purchasing Berry, Linn will significantly blster its oil production and increase its holdings in California and the Permian Basin in western Texas. The company estimates that its newest acquisition will increase its proved reserves by 34 percent and its production capabilities by 30 percent. And Berry’s reserves are estimated to be about 75 percent oil and liquids, considered to be significantly more valuable than natural gas given current prices.

Linn cited the growth promised by the deal in announcing an increase in its quarterly distributions to unitholders, to 77 cents a unit from 72.5 cents a unit.

“Berry’s assets are an excellent fit for Linn, and we believe this transaction generates significant accretion to our distributable cash flow per unit,” Mark Ellis, Linn’s chief executive, said in a statement. “We have great respect for what the Berry management team has accomplished and consider the Berry employees to be an important part of this transaction.”

To help defray the tax hit that LinnCo will take on! through the deal, Linn will pay its affiliate $6 million a year through 2015.

LinnCo was advised by Citigroup, while a conflicts committee of its board was advised by Evercore Partners and the law firm Locke Lord. A conflicts committee of Linn’s board was advised by Greenhill & Comany and Akin Gump Strauss Hauer & Feld.

Latham & Watkins served as legal counsel to both Linn and LinnCo. Berry was advised by Credit Suisse and the law firm Wachtell, Lipton, Rosen & Katz.

Bumps in the Office Supply Merger

The announcement of the merger between Office Depot and OfficeMax had been carefully choreographed, with the intention of emphasizing that the deal was a transformative merger of equals. But that intention went awry when the deal was accidentally leaked in an errant earnings release from Office Depot early on Wednesday morning, sending bankers and lawyers scrambling, DealBook’s Michael J. de la Merced reports.

The chief executives portrayed the incident as a harmless mistake, and the planned announcement came about two hours later. Still, it prompted Office Depot’s chief executive, Neil R. Austrian, to call his counterpart at OfficeMax, Ravi K. Saligram, and apologize, Mr. de la Merced writes. “eople involved in the deal privately bemoaned the unexpectedly bumpy ride,” which recalled other times that major corporate news had been released prematurely. In this case, the mistake was blamed on the data provider Thomson Reuters.

The $1.2 billion all-stock merger, which both chief executives said could yield $400 million to $600 million in cost savings, is an effort by the companies to shore up their business after years of losing sales to rivals. In the fourth quarter, Office Depot’s revenue fell 12 percent, to $2.6 billion, from the period a year earlier, while OfficeMax’s fell 7.4 percent, to $1.7 billion. “One important negotiating point that was resolved early on was ensuring that the deal could be presented as a ‘merger of equals,’” Mr. de la Merced writes. Though Office Depot is paying a premium for OfficeMax, “neither company’s chief has a lock as the leader of the combined company.”

The uncertainty over governance is troubling, Steven M. Davidoff writes in the Deal Professor column. The companies “punted” on the issue, saying they would draw directors from each side, “but offered few additional details,” Mr. Davidoff says. And without a chief executive lined up, “this could be a recipe for disaster.”

ANHEUSER-BUSCH LOOKS TO RESOLVE ANTITRUST CONCERNS  |  Anheuser-Busch InBev is in talks with the Justice Department to try to resolve antitrust issues with its planned deal with Grupo Modelo, the parties announced on Wednesday, saying they had jointly requested a temporary stay of the Justice Department’s antitrust suit.

<>For Anheuser-Busch InBev, the $20.1 billion deal for the rest of Grupo Modelo promises enticing access to emerging markets. But the government cried foul on Jan. 31, saying the deal would unfairly increase Anheuser-Busch InBev’s control of the American beer market. Last week, Anheuser-Busch InBev “offered broad concessions, saying it would sell the rights to Corona and other Grupo Modelo brands in the United States to Constellation Brands, one of the world’s largest wine companies, for $2.9 billion,” Mr. de la Merced writes.

TIMES COMPANY PLANS TO SELL THE BOSTON GLOBE  |  The New York Times Company announced on Wednesday its intention to sell its properties in New England, including The Boston Globe, to focus on its flagship newspaper. The company said it had hired Evercore Partners to manage the sale of the New England Media Group, which includes The Globe, Boston.com, The Worcester Telegram & Gazette and Globe Direct, a direct-mail marketing company. Though the Times Company is expected to seek a buyer in an auction, it said in a release that “there can be no assurance that any transaction will take place.” After the company paid $1.1 billion for The Globe in 1993, “the Boston daily brought prestige and profits to the company” for years, Amy Chozick and Christine Haughney write on the Media Decoder blog. “But recently the newspaper has suffered in an industrywide decline in circulation and advertising revenue.”

ON THE AGENDA  |  Greenlight Capital, the hedge fund run by David Einhorn, is holding a conference call at 2 p.m. to discuss its effort to get Apple to return some of its cash to sareholders. “On the call, Greenlight will provide additional details regarding the options available to Apple, including the merits of Greenlight’s suggestion of distributing perpetual preferred stock to Apple shareholders for free,” the firm said in a release. Callers in the United States can dial 1-800-901-5241 and enter the code 62063868. The American International Group and Hewlett-Packard report earnings on Thursday evening. Data on existing home sales for January is out at 10 a.m. Stanley Druckenmiller, the hedge fund magnate who left the business after 30 years, is on CNBC at 3:30 p.m. Robert H. Benmosche, A.I.G.’s chief executive, is on CNBC at 4:10 p.m.

CARLYLE REPORTS DROP IN PROFIT  |  The Carlyle Group announce! d on Thur! sday that economic net income, a measure of profitability, was $182 million in the fourth quarter, compared with $254 million in the period a year earlier, while distributable earnings were $188 million, down from $247 million. Still, the firm said it raised twice as much capital last year as it did in 2011. “Our performance over the past two years was marked by steady, continuous progress across our business,” David M. Rubenstein, the co-founder and co-chief executive, said in a statement.

JOHN MACK PUTS APARTMENT UP FOR SALE  |  John Mack, the former head of Morgan Stanley, is looking to sell his Upper East Side condo for $22.5 million, Curbed reports. The duplex apartment includes a terrace and solarium and has been “completely renovated in the spirit of the Dorchester in London,” the listing says.

Mergers & Acquisitions Â'

Exxon Wins Approval for Celtic Exploration Deal  |  The blessing from the Canadian government is the final regulatory hurdle for Exxon Mobil’s acquisition of Celtic Exploration for $2.64 billion, Celtic said. REUTERS

After Heinz Deal, Campbell Soup to Review Its Costs  |  The chief executive of Campbell Soup, Denise Morrison, said the $23 billion deal for H.J. Heinz was a “call to action” for her company “! to be eve! n more aggressive about costs,” according to Reuters. REUTERS

Incoming Chief of BHP Billiton Says Deals Aren’t a Focus  |  “You would be wrong to say that M.&A. is completely excluded, but it is not central to the strategy that I am shaping up,” Andrew Mackenzie, the incoming chief executive of BHP Billiton, said. REUTERS

Taiwan’s Finance Ministry Opposes Bank Merger  | 
WALL STREET JOURNAL

INVESTMENT BANKING Â'

JPMorgan Said to Be Looking to Sell Mortgage Bonds  |  JPMorgan Chase “is seeking to sell securities tied to new U.S. home loans without government backing in its first offering since the financial crisis that the debt helped trigger. The deal may close this month, according to a person familiar with the discussions,” Bloomberg News reports. BLOOMBERG NEWS

Citigroup’s Chairman Said to Rule Out a Possible Breakup  |  Michael E. O’Neill, Citigroup’s chairman, wh! o once ur! ged the company to consider splitting up, “has concluded that breaking up Citigroup doesn’t make sense now, given economic and regulatory uncertainty as well as a host of financial considerations,” The Wall Street Journal reports. WALL STREET JOURNAL

How Wells Fargo Invests Its Own Money  |  Wells Fargo “invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees,” but the activity is considered “merchant banking,” making it likely exempt from the Volcker Rule, Reuters writes. REUTERS

European Banks Move to Reassess Risk  |  Big banks in Europe are recalculating the riskiness of certain assets, a strategy that increases their ratio of capital to risk-weighted assets, The Wall Street Journal reports. “While such maneuvering has been going on for years, analysts say it appears to be accelerating at some major European banks.” WALL STREET JOURNAL

PRIVATE EQUITY Â'

Forstmann Little Said to Put Talent Agency on the Block  |  The private equity firm Forstmann Little, which is in the process of! selling ! its holdings, “has decided to put its sports and modeling talent agency IMG up for sale, and is in the process of picking an investment bank to lead the effort, three people familiar with the matter said,” Reuters reports. REUTERS

HEDGE FUNDS Â'

Herbalife Looks to Improve Clarity of Disclosures  |  On a conference call, Herbalife said it would change how it identifies its customers, after criticism from the hedge fund manager William A. Ackman. REUTERS

An ‘Icahn Squeeze’ in Herbalife Stock  |  The structure of Carl C. Icahn’s position in Herbalife suggests it could end up putting upward pressure on the stock in early March, an analyst wrote, according to Barron’s. BARRON’S

Hedge Fund Started by Former Goldman Trader Said to Be Shutting Down  | 
FINALTERNATIVES

I.P.O./OFFERINGS ! Â'

Blackstone, Fielding Bids for SeaWorld, Said to Favor I.P.O.  |  The Blackstone Group “is leaning toward an initial public offering of SeaWorld Entertainment Inc. after receiving bids from Apollo Global Management and Onex Corp. for the theme-park operator, said people familiar with the matter,” Bloomberg News reports. BLOOMBERG NEWS

Owner of Grand Central Terminal Joins Opposition to Empire State Building I.P.O.  | 
BLOOMBERG NEWS

VENTURE CAPITAL Â'

Tesla’s Earnings Indicate Some Customer Cancellations  |  Tesla’s latest earnings release suggests that some customers canceled orders when it became time to make a substantial down payment. DealBook Â'

Pinterest Said to Raise Money at $2.5 Billion Valuation  |  The popular scrapbooking site Pinterest raised $200 million, AllThingsD reports. ALLTHINGSD

LivingSocial Raises $110 Million From Existing Investors  | 
BLOOMBERG NEWS

LEGAL/REGULATORY Â'

A Revolving Door in Washington With Spin, but Less Visibility  |  The important fights in Washington are happening away from the media gaze. For lobbyists, the real targets are regulators and staff members for lawmakers, Jesse Eisinger writes in his column, The Trade. The Trade Â'

Chesapeake Wraps Up Review of C.E.O.’s Dealings  |  Chesapeake Energy said its internal examination of te financial dealings of Aubrey K. McClendon, the chief executive who is stepping down on April 1, found no “intentional” misconduct, Reuters reports. REUTERS

Dissent at the Fed on Measures to Lift Growth  |  The New York Times reports: “There are widening divisions among officials of the Federal Reserve over the value of its efforts to reduce unemployment, but the authors of its bond-buying policy remain firmly in control, according to an official account of the January meeting of the Fed’s policy-making committee.” NEW YORK TIMES

Carlyle\'s Profit Falls in 4th Quarter as Growth Slows

The Carlyle Group said on Thursday that its profit for the fourth quarter fell 28 percent from a year ago, as the growth of its portfolio companies slowed.

In the fourth quarter, Carlyle reported $182 million in profit, expressed as economic net income, compared to $254 million from the same time a year ago. That amounts to 47 cents per unit. Analysts on average had expected about 66 cents per unit, according to a survey by Capital IQ.

And Carlyle’s distributable earnings â€" a metric that the firm prefers because it tracks actual payouts to the investment shop’s limited partners â€" fell 24 percent from the year-ago period, to $188 million. Using generally accepted accounting principles, Carlyle earned $12 million in net income.

The results fall short of what rivals like the Blackstone Group and Kohlberg Kravis Roberts have reported for the fourth quarter. Private equity firms in general have gained from improvements in the markets, which have lifted the valuations of their portfolios and bolstered their core business of buying and selling companies.

Carlyles attributed its fall in economic net income to a smaller appreciation in the value of its portfolio. It reported a 4 percent gain for the quarter, compared to 7 percent for the same time a year ago.

The decision to not begin reaping carried interest from! its latest mainstay fund, Carlyle Partners V, weighed on distributable earnings. The company opted to hold off, given the relative freshness of the fund and the influx of new investments like the buyouts of the TCW Group and Getty Images.

Carlyle highlighted its strong fund-raising and gains from selling off investments. The firm raised $4.6 billion in new funds for the quarter and $14 billion for the year, compared to a total of $6.6 billion raised in all of 2011. And the firm generated $6.8 billion in realized proceeds for the quarter and $18.7 billion for the year, compared to $17.6 billion for the prior year.

“We had another excellent year,” David M. Rubenstein, one of Carlyle’s co-chief executives, said in a statement. “Our performance over the past two years was marked by steady, continuous progress across our business.”